Balancing the logistics cost-of-service equation in an increasingly uncertain business environment

The emphasis in the press, trade publications, and even academic publications is increasingly on supply chain operations, collaboration, and software. There is no argument that these are important considerations as companies struggle to compete in highly competitive markets and an economically difficult environment. This emphasis on “lean” or “JIT” operations presupposes the ability of the firm to operate on a minimum level of inventory and deliver a high level of service. Too often, the basic and vital interdependency between transportation and inventory, necessary to support this objective, is forgotten in the emphasis on the total picture as embodied by the supply chain. It has been said that “the devil is in the details.” It may be time for many firms to take another look at inventory, transportation and the cost of service